The U.S. economy expanded more than expected in the second quarter, as the nation rebounded from a severe winter as a result of broad growth from many pockets of the economy.
Real gross domestic product, or the output of goods and services produced by U.S. labor and property, climbed at a seasonally adjusted annual rate of 4% in the second quarter. The Commerce Department reported the increase was primarily due to positive contributions from personal consumption expenditures, as well as private inventory investment, exports, state and local government spending and residential fixed investment.
Economists polled by Bloomberg had projected a 3.1% increase in GDP, rebounding from the decline of 2.1% in the first quarter of the year. The second-quarter figures reported on Wednesday are an “advance” estimate, and will likely be revised when the Commerce Department issues a second estimate on Aug. 28.
“The economy is doing pretty well, there was wonderful job growth in the second quarter, though consumer spending was a little less than we would like and durable goods was a little disappointing,” said Bob Baur, chief global economist at Principal Global Investors.
For months, observers had predicted the economy would bounce back in the months after a harsh winter temporarily dented the economic recovery. Though the economy is progressing along nicely, a weak first-quarter performance led economists and other groups, including the International Monetary Fund, to cut their 2014 growth forecasts for the United States.
Several pockets of the economy have performed particularly well. New automobile sales have been rising, labor conditions have general strengthened and tourism is also improving. Conversely, housing data for June was choppy and some post-recession trends–including long-term unemployment and low labor force participation–have concerned policymakers.